Question: Problem 7-12 (Algo) Consider the following table, which gives a security analyst's expected return on two stocks and the market index in two scenarios: Scenario

Problem 7-12 (Algo) Consider the following table, which gives a security

Problem 7-12 (Algo) Consider the following table, which gives a security analyst's expected return on two stocks and the market index in two scenarios: Scenario 1 2. Probability 0.5 0.5 Market Return 6% 16 Aggressive Stock 2.6% 27 Defensive Stock 4.4% 14 Required: a. What are the betas of the two stocks? (Round your answers to 2 decimal places.) Beta A Beta D b. What the expected of on each stock? (Round your to 2 decimal aces. Rate of return on A % Rate of return on D % c. If the T-bill rate is 7%, what are the alphas of the two stocks? (Negative values should be indicated by a minus sign. Do not round intermediate calculations. Round your answers to 2 decimal places.) % Alpha A Alpha D %

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